Zai Lab has made significant progress in recent months in the number of hospitals that list ZEJULA as an approved medicine. From the date of National Reimbursement Drug List (NRDL) implementation on March 1, 2021 to June 30, 2021, the number of hospitals listing ZEJULA has increased sevenfold to more than 800.

Complete enrollment of the Phase 1b study of ZEJULA in combination with tebotelimab in gastric cancer.

Announce topline results of the Phase 3 PRIME study of ZEJULA in Chinese patients with first-line ovarian cancer.

Seek NRDL inclusion for a first-line ovarian cancer indication.

Continue to explore additional indications and combination opportunities.

In July 2021, Zai Lab partner Novocure announced the final results from its Phase 2 pilot HEPANOVA trial in liver cancer testing the safety and efficacy of TTFields together with sorafenib for the treatment of advanced hepatocellular cancer. In 21 evaluable patients, HEPANOVA showed a 76% disease control rate, 9.5% objective response rate and 5.8 months of progression free survival in a patient population with poor prognosis and limited exposure to study treatments. In patients who completed at least 12 weeks (n=11) of TTFields treatment, the disease control rate was 91% with an 18% objective response rate. Novocure is actively designing a Phase 3 pivotal trial that contemplates TTFields together with the current standard of care, including immunotherapy.

In May 2021, Zai Lab partner Novocure announced that the U.S. Food and Drug Administration (FDA) approved the Investigational Device Exemption (IDE) supplement incorporating the independent data monitoring committee’s recommended protocol changes for its Phase 3 pivotal LUNAR trial in NSCLC, reducing the enrollment requirement to 276 patients with 12 months follow-up following the enrollment of the last patient. Novocure now anticipates last patient enrollment in the LUNAR trial in the fourth quarter of 2021, with final data available in 2022.

In April 2021, 26 presentations on TTFields at the American Association for Cancer Research (AACR) Annual Meeting 2021 suggested the broad applicability of TTFields.

In April and May 2021, Zai Lab initiated the pivotal Phase 3 LUNAR trial in NSCLC and the pivotal Phase 3 METIS trial in brain metastases from NSCLC, respectively, in Greater China.

Zai Lab held extensive campaigns for Optune in Standardized Multi-Department Treatment programs in hospitals.

Optune has been listed in 14 regional customized commercial health insurance plans offered by provincial or municipal governments (or “supplemental insurance plans”) since its commercial launch in China in the third quarter of 2020.

Submit a Marketing Authorization Application (MAA) for malignant pleural mesothelioma.

Join the global Phase 3 pivotal PANOVA-3 trial for TTFields in locally advanced pancreatic cancer and the Phase 3 pivotal INNOVATE-3 trial for TTFields in recurrent ovarian cancer.

Complete enrollment of the Phase 2 pilot trial in first-line gastric adenocarcinoma.

Complete the interim analysis of the Phase 3 pivotal INNOVATE-3 trial for TTFields in recurrent ovarian cancer.

In July 2021, QINLOCK was included in the Chinese Society of Clinical Oncology (CSCO) Guidelines for Diagnosis and Treatment of Gastrointestinal Stromal Tumors 2021 for second-line treatments for advanced GIST patients.

In June 2021, Deciphera presented the intra-patient dose escalation data from the INVICTUS Phase 3 study of QINLOCK in GIST patients. The exploratory analysis showed that dose escalation to QINLOCK 150 mg BID after disease progression on QINLOCK 150 mg QD may be able to offer substantial additional clinical benefit with a tolerable safety profile.

In May 2021, Zai Lab launched QINLOCK in China, our third innovative oncology product launch in China in the last 16 months. Zai Lab has held multiple national launch events for QINLOCK across China since its approval. QINLOCK is listed in two supplemental insurance plans.

Obtain topline data from the INTRIGUE Phase 3 study of QINLOCK in patients with second-line GIST in the fourth quarter.

Initiate a Phase 1b/2 study in combination with the MEK inhibitor binimetinib in imatinib-refractory or -intolerant GIST patients.

In June 2021, Zai Lab partner Mirati announced that the FDA granted Breakthrough Therapy Designation to adagrasib for the potential treatment of NSCLC patients who harbor the KRAS^G12C mutation following prior systemic therapy.

Mirati plans to present updated NSCLC data in the second half of 2021 and submit an NDA in the United States for adagrasib in the fourth quarter of 2021 for the potential treatment of patients with NSCLC who harbor the KRAS^G12C mutation following prior systemic therapy.

Mirati plans to present new CRC data from the Phase 1/2 KRYSTAL-01 study evaluating adagrasib in combination with cetuximab (ERBITUX^®) in second-line patients with a KRAS^G12C mutation and as a monotherapy in patients who have received three or more lines of therapy.

In May 2021, Zai Lab partner Regeneron resumed the enrollment of patients with follicular lymphoma and diffuse large B-cell lymphoma in the potentially pivotal Phase 2 program.

Enroll the first patient in Greater China in the global, potentially pivotal Phase 2 program.

Initiate development of a subcutaneous formulation.

In May 2021, Zai Lab enrolled the first patient in Greater China in the global registrational Phase 2 TRIDENT-1 study for both the ROS1+ advanced NSCLC and the NTRK+ advanced solid tumor cohorts.

Reach enrollment of 50 patients from both the Phase 1 and Phase 2 portions of the TRIDENT-1 study in the ROS1-positive TKI-naïve NSCLC patient cohort. Zai Lab partner Turning Point Therapeutics has announced that they anticipate an FDA meeting during the first quarter of 2022 to discuss topline blinded independent central review (BICR) results for that cohort.

Initiate TRIDENT-2, a Phase 1b/2 combination study in KRAS-mutant solid tumors.

Provide a clinical data update from the ongoing TRIDENT-1 study.

Report initial clinical data from the Phase 1/2 CARE study in pediatric and young adult patients.

Submit an NDA for pretreated metastatic HER2-positive breast cancer around year-end.

Obtain initial data from Module A of the MAHOGANY study in the third quarter.

Complete the final overall survival analysis of the SOPHIA study, a randomized, open-label Phase 3 study evaluating margetuximab plus chemotherapy compared to trastuzumab plus chemotherapy in patients with HER2-positive metastatic breast cancer who have previously been treated with HER2-targeted therapies, in the third quarter.

In April 2021, Zai Lab partner Amgen was granted Breakthrough Therapy Designation by the FDA for bemarituzumab as first-line treatment for patients with FGFR2b overexpression in HER2-negative metastatic and locally advanced gastric and gastroesophageal adenocarcinoma in combination with modified FOLFOX6 (fluoropyrimidine, leucovorin, and oxaliplatin).

Initiate a registrational Phase 3 study in gastric cancer in the fourth quarter.

Plan for clinical development in other FGFR2b+ solid tumors, including squamous cell NSCLC.

In June 2021, Zai Lab partner Cullinan announced Phase 1/2a interim data of CLN-081 in NSCLC EGFR exon 20 patients. CLN-081 continued to demonstrate acceptable overall safety and tolerability, with an encouraging GI toxicity profile.

Initiate a potentially registrational Phase 2b clinical trial.

In August and June 2021, Zai Lab partner Turning Point Therapeutics was granted Fast Track Designation and Orphan Drug Designation, respectively, by the FDA for TPX-0022 in gastric cancer.

Provide a clinical data update from the dose-finding portion of the Phase 1 SHIELD-1 study and initiate the Phase 2 portion of the SHIELD-1 study, pending FDA feedback.

Initiate SHIELD-2, a Phase 1b/2 combination study with an epidermal growth factor receptor- (EGFR-) targeted therapy.

Zai Lab expanded the Phase 1b/2 study of tebotelimab in combination with ZEJULA into new indications in Greater China. In June and July 2021, Zai Lab enrolled the first patients in the biliary tract cancer and triple negative breast cancer cohorts, respectively.

Provide a clinical update, including future development plans.

In July 2021, Zai Lab partner argenx announced plans to develop two new indications for efgartigimod: myositis and bullous pemphigoid.

In June 2021, Zai Lab partner argenx announced that The Lancet Neurology published pivotal trial results from the Phase 3 ADAPT trial of efgartigimod for the treatment of adults with generalized myasthenia gravis (gMG).

To date, five Clinical Trial Applications (CTAs) have been approved by the NMPA.

Discuss with the NMPA a potential accelerated regulatory pathway for efgartigimod in gMG.

Continue to explore and advance additional indications in coordination with argenx.

Enroll the first patients in Greater China in the global pivotal Phase 3 trials of the subcutaneous formulation in primary immune thrombocytopenia (ITP) and pemphigus vulgaris (PV).

Expect CTA submissions for additional indications.

Potential FDA approval, with a Prescription Drug User Fee Act (PDUFA) target action date of December 17, 2021, and global commercial launch of efgartigimod for the treatment of patients with gMG.

Initiate clinical trials in myositis and bullous pemphigoid.

In June 2021, Zai Lab partner Paratek Pharmaceuticals announced the sNDA approval from the FDA of the NUZYRA oral-only dosing regimen for the treatment of CABP.

Potential NMPA approval and commercial launch of NUZYRA for the treatment of CABP and ABSSSI.

In July 2021, Zai Lab and its partner Entasis Therapeutics completed patient enrollment in the global registrational Phase 3 ATTACK clinical trial.

Announce the top-line data readout of the global registrational Phase 3 ATTACK clinical trial early in the fourth quarter.

Announce the top-line data readout of the global Phase 1 study.

Determine a recommended Phase 2 dose in the ongoing Phase 1 trial.

Initiate a Phase 2 proof-of-concept study by year-end.

In July 2021, Zai Lab and Schrödinger, Inc. announced a global discovery, development and commercialization collaboration focused on a novel DNA damage repair target in oncology. Schrödinger is a recognized leader in providing physics-based computational software platforms used in drug discovery. The research program will be conducted jointly by the scientific teams of the two companies. Following the selection of a development candidate, Zai Lab will assume primary responsibility for global development, manufacturing and commercialization in the program. This initiative will complement Zai’s existing discovery efforts in the DNA damage response pathway in addition to potential combinations with existing Zai Lab products such as the PARP inhibitor ZEJULA and ZL-2309.

In June 2021, Zai Lab and Mirati announced that the companies entered into a collaboration and license agreement for adagrasib, a small-molecule KRAS^G12C inhibitor, in Greater China. Under the terms of the agreement, Zai Lab obtains the right to research, develop, manufacture and exclusively commercialize adagrasib in Greater China. Zai Lab will support accelerated enrollment in key global, registration-enabling clinical trials of adagrasib in patients with cancer who have a KRAS^G12C mutation.

In June 2021, Zai Lab and MacroGenics announced that the companies entered into an exclusive collaboration and license agreement involving up to four immuno-oncology molecules. The first collaboration program covers a lead research molecule that incorporates MacroGenics’ DART platform and binds CD3 and an undisclosed target that is expressed in multiple solid tumors. The second collaboration program covers a target to be designated by MacroGenics. For both molecules, Zai receives commercial rights in Greater China, Japan, and Korea, and MacroGenics receives commercial rights in all other territories. For the lead molecule, Zai Lab receives an option to convert the regional arrangement into a global 50/50 profit share upon reaching a predefined clinical milestone. Zai Lab also obtains exclusive, global licenses from MacroGenics to develop, manufacture and commercialize two additional molecules.

Zai Lab plans to host a virtual R&D Day on September 22, 2021, to provide a comprehensive update on our business and expanding pipeline across oncology, autoimmune and infectious diseases. Additional details will be announced at a later date.

Zai Lab continues to strengthen and expand its team. New hires include Danielle Halstrom, Senior Vice President, Global Head of Communications, and Jean Wang, PhD, Senior Vice President, Small Molecule CMC.

As of June 30, 2021, Zai Lab employed 1,600 full-time employees, including 594 and 832 employees engaged in research & development (R&D) and commercial activities, respectively.

We continue to invest in our global organization and facilities. During September, we plan to expand our presence in the United States by opening a clinical development and business facility in Cambridge, MA, to tap into the Boston area biopharmaceutical ecosystem. This facility complements our growing R&D and business center in the San Francisco Bay area.

For the three months ended June 30, 2021, net product revenues were $36.9 million, compared to $11.0 million for the same period in 2020. Revenues for the period were comprised of $23.4 million for ZEJULA, compared to $7.5 million for the same period in 2020; $9.5 million for Optune, compared to $3.5 million for the same period in 2020; and $4.0 million for QINLOCK, compared to nil for the same period in 2020.

R&D expenses were $142.2 million for the three months ended June 30, 2021, compared to $68.3 million for the same period in 2020. The increase in R&D expenses was primarily attributable to a $65 million upfront payment to Mirati and a $25 million upfront payment to MacroGenics; expenses related to ongoing and newly initiated late-stage clinical trials; and payroll and payroll-related expenses from increased R&D headcount.

Selling, General and Administrative expenses (SG&A) were $54.4 million for three months ended June 30, 2021, compared to $23.8 million for the same period in 2020. The increase was primarily due to payroll and payroll-related expenses from increased commercial headcount and expanded commercial activities in China.

For the three months ended June 30, 2021, Zai Lab reported a net loss of $163.3 million, or a loss per share attributable to common stockholders of $1.76, compared to a net loss of $80.6 million, or a loss per share attributable to common stockholders of $1.08, for the same period in 2020. The increase in the net loss was primarily attributable to payments related to new business development activities with Mirati and MacroGenics recorded in R&D expenses.

As of June 30, 2021, cash and cash equivalents, short-term investments and restricted cash totaled $1,767.3 million compared to $1,187.5 million as of December 31, 2020.

June 30,

2021

December 31,

2020

Assets

Current assets:

Cash and cash equivalents

Short-term investments

Accounts receivable (net of allowance of $5 and $1 as of June 30, 2021 and December 31, 2020, respectively)

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Total current assets

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Ordinary shares (par value of $0.00006 per share; 500,000,000 shares authorized, 94,758,189 and 87,811,026 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively)

Additional paid-in capital

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Treasury Stock (at cost, 6,086 and nil shares as of June 30, 2021 and December 31, 2020, respectively)

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